Alexander van Elsas’s Weblog on new media & technologies and their effect on social behavior

I read a few different posts this morning and they inspired me for this one. First there was a post by Betsy Schiffman writing about the Web 2.0 Expo. She writes:

Now that the first burst of enthusiasm for social networking has died, people are realizing that web 2.0 is actually a huge time sink.

Facebook, Twitter, Flickr and Plaxo may have helped foster community and communication, but they’ve also added immensely to the flow of often-interruptive messages that their users receive, leading to information overload and possibly a nasty internet addiction.

To underline this argument she uses a picture that I have used myself a few times already, but in a different context.

This is a set of logos of web 2.0 services, you can find many more of them here.

Another post that drew my attention was one by my favorite Pattern Houd, Rolf Skyberg. He writes about the principles of design and challenges us to rethink the way user interfaces are designed:

Is the ease with which we copy-paste both elements and information, forgetting the necessary influences of natural growth, decay, and selection?

If we forced ourselves to design only with pen and paper, would it necessarily create a more understandable interface? Pushing complexity away from the user, exactly where it should be?

Try this experiment for yourself, either in your next design, or your next powerpoint.

If you aren’t willing to take the time to draw each one of those fields and links, I can guarantee that your users don’t want to fill them in.

And he tops it off with a link to a cartoon that says it all.

What do these two posts have in common? To me they address a similar theme, using different approaches. Web 2.0 has brought democracy to web development. Underlying the web 2.0 developments lies a technology wave that has brought us near-zero service development cost. Anyone with an idea (it doesn’t have to be good) can become a web entrepreneur and build that idea into a tool. Anyone can launch that tool without distribution costs and use blogging platforms and social networks to make potential users notice the newly developed service. Anyone can affort to launch a Beta or concept service that isn’t finished because it can then be further developed with the user community. Anyone can build a service and forget about scalability, because it can always be done afterwards. Anyone can follow the ‘American’ dream and hopefully become successful and rich.

There is a clear upside to this democracy process. The speed of development and innovation is higher than ever. New ideas are born every day, but now new ideas can be materialized in the same tempo as they are conceived. There is also a downside to this. Lowering the thresholds to create new services doesn’t make the process of creating a great service ANY easier. If anything, the image above shows that clearly. There are literally thousands of “web 2.0″ services and brands out there. The web 2.0 wave is fragmented into uncountable small, niche, often cloned services. While Betsy talks about the information overload pressure on the user, I would say that the pressure is mostly on the web entrepreneur trying to get his niche ahead of the rest of the pack.

What strikes me most about it is that we tend to forget that building a great service, a great brand, the best usability, is actually all about craftsmanship. It isn’t a craft we all possess just because the technology has lowered the thresholds. Just because I can on-line create and edit images for free and with a few clicks it doesn’t make me a good designer. I can use Ruby on rails and have a web application up and running within the hour. But that doesn’t make me a great programmer or architect. I can easily come up with a web 2.0 brand name, just look at the web 2.0 directory. But that doesn’t make me a brand expert or a brand marketeer. And with the customer running around, constantly trying things out (hey it’s all free right), getting confused or bored easily, making something useful, actually creating user value is incredibly difficult.

Web 2.0 has brought us entrepreneurship and web development for all. But it doesn’t bring us craftsmanship. You either have it, or you don’t. But I know one thing. If you are thinking about becoming the next Facebook, Google, MySpace or whatever, begin your quest with finding talented people. It always starts there. Don’t be fooled by the ease of web development and distribution. Find talented people and create something that is designed, developed, implemented, branded and distributed with user value in mind. That will be the sured way to success.

A lot of different stories this morning all in some way related to you and me. Yes, we, the users, are under fire. Haven’t noticed it yet? Well, let’s see what is being said about us.

Mathew Ingram pointed me to a Business Week article in which it is said that User Generated Content is dead. The article even has a confronting title “Web video: move over amateurs”. Evidence from this bold statement came from examples where specific USG sites were closing down due to limited amounts of traffic. People now want professional content.

Mathew puts the finger on the spot when he says:

The thing that really bugs me about the BusinessWeek article is that there’s this false dichotomy between high-quality professional content and low-quality UGC crap. It’s not that binary, I would argue. It’s more like a spectrum, with professional content on one end, and as you move down the scale you get lower quality, until there’s your brother-in-law singing karaoke.

Is there a lot of UGC crap that only someone’s mother would watch? Sure there is. But there’s a lot of garbage produced by “professionals” that gets foisted on people through traditional media too, whether they want it or not. I’d take some half-decent UGC over that any day.

I agree with Mathew but would add an emotional aspect to it. When a user creates something and shares it with the world, he is essentially distributing emotions. Emotions of any kind. That is where the power and fascination of user generated content comes from. We often take the poor quality and amateurism for granted because we can almost feel what the user is trying to say. It is precisely for this reason I once argued that the music industry should stop thinking in terms of distribution music and start thinking in terms of distributing emotions. The first leads to suing illegal downloaders and failing business models, the lather leads to embracing the user and creating a business model on the user’s passions.

Then there is Jaron Lanier who writes an emotional post about not getting payed for his professional content.  I sympathise with Jason, but from a very different perspective. He takes the perspective of income for the creator, I would argue from the user point of view.

The web 2.0 free (but ad-based) business model leads to people like Jaron not being valued properly, but even more, to users not being taken seriously. Precisely for that reason I have argued for the need of a new revolution, this time a revolution in business models. This will lead to user centric thinking and monetizing user value. John Battelle points out to Jaron that the system itself isn’t corrupt, but that there is merely wrong execution. The best way to provide content for free, John argues, is by search. Exactly! In my opinion search is the only truly successful business model in which ads and free services work seamlessly together to provide value to the user.

So, let us not blame the user. It is the business model that works against us all. Let’s work on business models that provide the user the value he deserves and is willing to pay for!

The countdown continues. After I decided to write a post on the downfall of Facebook as their stealth ad system is being revealed, we are now on another day after. The day after Mark Zuckerberg announced his 3 way ad system for Facebook. For me the counter is starting to tick a little faster now, I’ll explain in a moment why.

As always I am looking around for analysis on this. In general people seem to be either positive about the move with a warning that it is a “dangerous way to go”. Or they are negative and warning about the user that won’t like to be hassled by his friends with commercial messages.

There are a few posts that drew my attention.

Nicolas Carr really hits Facebook hard with his post called ‘the social graft’. He says:

“It’s a nifty system: First you get your users to entrust their personal data to you, and then you not only sell that data to advertisers but you get the users to be the vector for the ads. And what do the users get in return? An animated Sprite Sips character to interact with.”

Mathew Ingram describes a mental picture of some guy barging into a party at my house and yelling about free pizza or T-shirts or something, and handing out coupons to all my friends while dressed up like a giant Coke can.

He would punch the guy entering his house in that way. I would probably too.

John Battelle wrote a small entry in which he adds to a quote from a CNET article from a Facebook executive:

“The company that can process the most data will win.” I’d modify that - the company that can process the most data intelligently and in context, wins”

I think John is right and wrong. Right, because the company that can process data intelligently and in context wins. Wrong, because Facebook isn’t the right context! That is why Google wins, the not only score better on clever and massive amounts of data processing, but they use it most intelligent in a context where a user is actually begging for advertisement attention (during a search).

Business Week takes the angle of the marketeer and advertiser who is excited about the new initiative in their post called Marketeers are your ‘friends’. They quote Mark Zuckerberg saying:

“The next 100 years is going to be different for advertising, and it starts today,” Zuckerberg told the crowd of 250 or so enthusiastic marketers and advertising executives who had gathered at a midtown loft for soft drinks, hors d’oeuvres, and a demonstration of Facebook’s new ad system. “Pushing your message out to people is no longer good enough—you have to get into the conversation.”

But who wants marketers in their conversation? If not enough do, the new news-feed ads will be bad news for Facebook.

But Mark, you aren’t getting into the conversation, you are really only trespassing. And btw, the example you provide where 2mln Facebook users join a suport breastcancer cause,  is actually a very bad example. People joined to support the good cause, not to support some brand.

Dave Winer, although he is positive on the move made by Facebook, ends his article with an excellent observation:

Long-term, however they both have problems because advertising is on its way to being obsolete. Facebook is just another step along the path. Advertising will get more and more targeted until it disappears, because perfectly targeted advertising is just information. And that’s good!

I think SocialAds are a bad idea. Actually I think the current web 2.0 free (ad-based) business model is a bad idea. There are 16Bln reasons to get out of that advertisement trap. And now Facebook is doing the wrong thing for the obvious reasons. Mark Zuckerberg couldn’t have said it any better than in this quote, taken from the press conference:

People will not be able to opt out of these social ads or turn them off, at least for now, unless they stop revealing information about themselves on Facebook. Says Zuckerberg: “It is an ad-supported service. It is a free service.”

You couldn’t be more right Mark! This is the Catch 22 of web 2.0. Facebook creates a service, drawing users to it by providing it for free, provide the user with the false illusion that his privacy is safe and then leverages the user profiles and the Social Graph network Facebook ‘owns’ and protects but didn’t create himself (the users did) by monetizing with ads. I said before it isn’t going to hold, as this business model is fueled form the wrong side. But I would go a step further and argue that SocialAds are based upon an entirely wrong assumption of friendship in the wrong context!

The power, according to Facebook lies in the user becoming a brand ambassador towards his friends. The best advice you can get is that from a friend. We all know this phenomenon. You are sitting with a friend and he tells you enthusiastically about a movie he has been too. Makes you want to go yourself, right? Why does that work? Because a lot of things happen at the same time. In the physical world there are many different stimuli that affect your behavior. Things like speech, sight, hearing, touch, feeling, movement, trust, relationships, common experiences or taste, context (like the fact that you are hanging out at your home together), all come together in your brain providing you with a feeling of value to your friends story. It also provides you the opportunity to DISAGREE with your friend.

But in the on-line world you lose most of these stimuli. In Facebook you get flattened stimuli from the newsfeed: “Alex went to this movie and he liked it”, or personalised ads using the profile information. But there is no “hanging out together, no voice, taste, touch or other stimuli, no way of agreeing or disagreeing with your friend. And worse, the stimuli aren’t in the right context. I’m not looking for advertisement there. And if I get these stimuli from my friends in my personal space, what will that do to the trust I have in them? At best I’ll try to ignore it, at worse I get fed up with my friend and disconnect him. Facebook will be left with the bargain hunters (get a free coke if you…), ad blind people (ignoring any brand or ad message), brand bashers (have you seen these morons trying to sell me….) and finally nothing as users will start to see through the advertisement trap they are in and move to another place where services provide real value instead of “an animated Sprite bottle to interact with”.

The very best one being from Doc Searl here. In his post called New World Disorder he quotes The Guardian with an article by Jeff Jarvis, Chaos theory: advertising cash will soon decrease,

Advertising is no one’s first choice as the basis of a relationship. For marketers, it’s expensive and inefficient. For customers, it’s invasive and annoying. And targeted advertising is only slightly more efficient and slightly less annoying. Clearly, the direct relationship between a customer and a company is preferable. But that direct connection cuts out the middlemen - that is the media.

So true. As said before. The web 2.0 bubble is building up way too much pressure, who has a needle?

After the dust clears from the Google answer to Facebook’s popularity, and the first applications of the new APIs are already showing up, it is now the time to start analysing what should happen next.

Let’s get one thing straight. Google might get a formidable position in social networking land with their “one ring that binds them all” called OpenSocial. But Google still needs excellent application developers to start using the infrastructure they will provide through their OpenSocial APIs. The most important challenge will be if we can develop user centric services instead of network centric services. I have written a number of posts on this earlier, for example “The flaws in web 2.0 and how to correct” and a followup to that “Design of an Open Social Interaction Network: Human Needs” describing some of the human needs that are to be addressed.

In this context I came across a few posts this morning that drew my attention.

Chris Messina wrote a really excellent piece called “OpenSocial and Address book 2.0: Putting People into the protocol”. In this piece he talks about a topic that I have written about a lot. The observation that services are build the benefit of the service creator, not for its user.

The future is in portable, independent identities valid, like Visa, everywhere that you want to be. It’s not just about social network fatigue and getting fed up with filling out profiles at every social network you join and re-adding all your friends. Yeah, those things are annoying but more importantly, the fact that you have to do it every time just to get basic value from each system means that each has been designed to benefit itself, rather than the individuals coming and going. The whole damn thing needs to be inverted, and like recently rejoined ant segments dumped from many an ant farm, the fractured, divided, shattered into a billion fragments-people of the web must rejoin themselves and become whole in the eyes of the services that, what else?, serve them!

He goes on and envisions a future in which this relationship is inverted completely:

Imagine this: imagine designing a web service where you don’t store the permanent records of facets of people, but instead you simply build services that serve people. In fact, it’s no longer even in your best interest to store data about people long term because, in fact, the data ages so rapidly that it’s next to useless to try to keep up with it. Instead, it’s about looking across the data that someone makes transactionally available to you (for a split second) and offering up the best service given what you’ve observed when similar fingerprint-profiles have come to your system in the past.

And while you are at it read his original post “People in the protocol” as well. Chris used to work at Flock. No wonder he is able to come up with such a list. Only few seem to really understand the power of the web browser in service development. It is by definition user centric, not platform or destination centric. It is a tool that will help solve the issue that the Internet does not evolve around you now.
Another interesting post was written by Doc Searl called “Free Customers make free markets”. He writes in response to a post by Dave Winer who proposes that the next change will be to free the user:

When we have free users, we won’t ask companies to “let me control” my data. Instead, we’ll ask “What data of mine will I let this or that company use.”

Think about what it means to be a “user”, and what a “user” is.

Because companies are users too.

The idea behind this challenge isn’t to put the shoe on the other foot, but to put proper shoes on both feet.

We need real relationships here. Not the kind where one party has the exclusive power to “let” the other party have rights, data or anything else. Not the kind where one party has to beg the other party for their freedom. Not the kind where “Customer Relationship Management” consists of “capturing”, “managing” and “owning” customers as if they were cattle.

Then I came across a small article that talks about Yahoo’s plans with social networking. Nice one. I challenged Yahoo, Google and Microsoft earlier to start innovating on the concept of e-mail as a social networking tool instead of copying Facebook, and it looks like Yahoo is on it (I doubt I put them on it though :-))

So what does all of this mean? To me these are important signals. Acknowledgement of influencial bloggers that we desperately need to rethink business models currently used in many web 2.0 companies.

OpenSocial will fuel a fire that cannot be stopped once some serious developments evolve using these APIs. Developments in which the user is standing in the center as the most important person to be served. Not the network, not the service creator, not even the almighty Google.

The user is back, and he won’t be ignored this time!

Short update: Google is announcing right now that MySpace joins the OpenSocial camp. According to TechCrunch they have been working on it in secret. Well, it is good news for the user, now we wait and see if Facebook will open up under this pressure.

Steve Rubel wrote a nice article called “The web 2.0 world is Skunk Drunk on its own Kool-Aid”. He talks about his own career where he wrote many positive articles about any new site that would come along, until he realised that he became less interested in every shiny little site that came along and more in social change.

I like the article. It is from the heart, and Steve talks about things I have written about myself a few times. Steve especially hacks in on startups trying to make an easy buck and the bloggers that make a living blogging about it.

I think it is not only the startups going after the quick bucks, it is also the investors trying to gain value on the very short term. And don’t forget the “traditional” media companies losing their own territories and now moving into the on-line world trying to play the same old game there. This whole eco system is being fed by a bunch of tech bloggers that really are way too far off the real world to know what the needs are of real users.

Every site bringing the same scoop, talking about the same (pre-orchestrated) new products. There is a bubble building up pressure fast. Luckily it is contained within the Bloggers vacuum. I checked with my friends who are not so tech as I am, and they live their lives normally without being distracted from another “social life saving” service. Phew, we’re in the clear there.

But my main concern is that the one thing web 2.0 brought us, “free (but ad-bases) services” is now exactly what we need to get rid off in order to move out of web 2.0 into something new. Innovation that is user centric, not ad centric or social network centric. Innovation that leads to truly valuable services for its user.

So who has the needle? Who will deflate this self created web 2.0 bubble and help us focus again on the one thing (the user!) that really matters? Maybe the innovation comes from an unexpected, old-fashioned and outdated service called e-mail? I do know there are some bloggers out there that are focusing on things that are important, so there is still hope for us all.

Short Update:

After I posted this, I noticed that the discussion intensifies in different directions. John Heilemann posted another message called “Web 2.0 bubble” in New York Magazine. When reading it I first thought it was an article that could help providing some direction in this discussion. A little math exercise shows the financial size of the bubble we are in when John states:

It doesn’t require a Mensa-level IQ to make the case that the Web 2.0 boom is in fact a bubble. There’s the glut in venture capital: $3.4 billion invested in fledgling Internet firms in 2007, the most torrid pace since the height of the Web 1.0 mêlée. There are those lunatic valuations: A year ago, the burgeoning social-networking outfit Facebook was nearly bought by Yahoo for $1 billion; today, the price tag is $15 billion, an eye-popping number that did nothing to dissuade Google and Microsoft from bidding richly, fervently, to buy a tiny sliver of the company—a competition that Microsoft finally won last week. There’s the frothy run-up in the nasdaq, which has lofted Amazon’s stock back to its all-time high, has inflated Yahoo by almost 30 percent this year, and is rapidly propelling GOOG toward $700. And then there’s the flood of derivative, dum-dum start-ups inducing a severe case of dot-com déjà vu. To wit: MyCatSpace.com.

But he misssed a turn completely and drove it to a discussion on the difference between VC’s in NY and in the bay area . He ends the article with the following quote:

It’s a culture also riven with envy, to be sure, the direct result of Gotham’s collective inferiority simplex when it comes to matters Webby. “People in New York feel a chip on their shoulder because they’re not in the center of this thing,” says Seth Goldstein, a longtime Silicon Alley player now decamped to Marin County. “The question is, why didn’t Netscape start in New York? Why didn’t Google start in New York? Why didn’t Yahoo start in New York? It’s that things are able to percolate here, not because of idealism but because of a willing suspension of disbelief.”

Sorry John, too much emphasis on sidetracks. It is not the nature or location of a VC that leads to web 2.0 bubble decisions I think the bubble pressure is increasing because too few entrepreneurs are concentrating on user value.